KUALA LUMPUR: Fitch Rating's affirmation of Malaysia's sovereign credit ratings at BBB+ with a "stable" outlook for 2023 reflects confidence in the government's administration and the strength of Malaysia's economic recovery.
Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, said the affirmation even reflected the country's resilience admist an uncertain and highly challenging global landscape.
"Moving forward, the government is determined to ensure that the nation's fiscal position continues to strengthen through gradual consolidation of the fiscal deficit while balancing the need to support economic growth during these challenging times globally.
"Through the 2023 Budget, which will be tabled on Feb 24, the government will continue to intensify reform efforts to drive the country's economic recovery, boost investment and improve public infrastructure.
"Continued emphasis will also be placed on initiatives to control inflationary pressures and ease the rakyat's burden from the high cost of living," he said in a statement today.
The budget, he said, would also focus on strengthening the country's finances and governance, to support the government's commitment to sustain the economic recovery momentum towards improving the well-being of the rakyat in line with the theme of "Building Malaysia Madani".
Earlier, Fitch said Malaysia's rating balanced a diversified economy with strong medium-term growth prospects against high public debt, a low revenue base relative to the operating expenditures."
Fitch expects Malaysia's GDP to moderate to four per cent this year and 4.8 per cent next year, from a strong growth of 8.7 per cent in 2022 amid easing of Covid-19 restrictions and as the government continues to provide relief measures and support towards rapid and broad recovery of the economy.
The agency also expects services to continue to be boosted by resilient domestic demand, contained inflation and the recovery in tourism-related sectors from the re-opening of China.
The medium-term growth trend is expected to remain robust, between four and five per cent.
Fitch also anticipated that manufacturing and exports were likely to face headwinds from weaker global demand for electronics and commodities.
Fitch assumed deficit reductions would be gradual and expected fiscal deficit to decline to an average of around 4.5 per cent of gross domestic product in 2023–2025, citing upside risks including greater expenditure rationalisation and substantial revenue mobilisation measures.